Yesterday at the LSA’s Place Conference in New York City, Neil Sweeney, Founder and CEO of Killi, shared his perspective on the data revolution that is coming. As Neil puts it, the ‘Privacy Genie’ is out of the bottle and will not go back in.
There are three big themes impacting how we move forward:
- Legislation and compliance
- Security and storage
- Consumer inclusion
Let’s look at each one a bit closer.
Legislation and Compliance
The recent California Consumer Privacy Act (CCPA) is not a Y2K moment. There is already a precedent in the market with all that has been changing because of GDPR. Companies are making big moves with their data — look at what Facebook, Google and others are doing — not to mention some brands completely left the EU.
Some may have dropped the EU but you can’t drop California or the US. With CCPA you won’t be able to deploy the same strategy you did for GDPR.
Security and Storage
We now live in a world with data lakes that are honey pots waiting to get hacked. The larger the company and database, the bigger the target. There is a 45% year over year increase in hacks and it isn’t slowing down. Think Equifax or YAHOO!, which was the biggest single data breach in history impacting 3 billion users. Moving forward, companies need to fundamentally change how they store data.
The cost to remedy a large hack: $7.5M. The bigger the company, the more expensive. Have you allocated the necessary capital to prepare for this risk? Probably not!
There is an inverted value proposition with consumers and the use of their data. We hear some say that consumers do not care about sharing their data — this is not true. Cambridge Analytica proved otherwise. The real issue is that consumers don’t know what they don’t know. They do not realize (1) how much their data is worth and (2) what some companies are doing with their data.
How much is your data worth?
Let’s use Facebook in North America as a proxy. You are likely worth $30/month to Facebook. The value of your personal data is growing at a rate of 35% per year. Facebook made $40 billion —that’s right billion with a B—NET last year from 2.2 billion users. You layer in thousands of other companies also buying the data and you get to a more likely $200/month value on your data.
So, Now What?
This will all create significant supply pressure. The hacks will remove data supply and compliance legislation will increase costs for first-party, high fidelity data. Additionally, consumers will soon see the real value of their data and the option of putting your head in the sand is gone. As an industry, we will need to develop tools to help.
Apps like Killi move us in the right direction. Because users keep all of their data on the handset, the security and storage issue is gone. Further, because the consumer is expressly providing consent, brands have a source for high fidelity, compliant data. And, the blockchain allows for consumers to enter into a 1:1 contract with brands and finally receive payment for their personal identity.
We will likely see two types of companies come out on the other side of this:
- The ones who check the box for basic compliance
- Progressive companies who lean in and make this part of their DNA
I hope everyone in the room saw the benefit of moving towards #2 and developing strategies that not only help their bottom line, but also do right by the consumer.
This post original featured on LSA Insider website following #PlaceConf in September, 2018.